by Adam Shell and Kim Hjelmgaard, USA TODAY

by Adam Shell and Kim Hjelmgaard, USA TODAY

NEW YORK -- Stocks tumbled Wednesday as major benchmark indexes hit new 2014 closing lows after the Federal Reserve opted to trim its monthly bond purchases by an additional $10 billion a month.

The Dow Jones industrial average fell 190 points, or 1.2%, to 15,738.79. Before the Fed statement was released the Dow was down 125 points.

The Standard & Poor's 500 index dropped 18 points, or 1% to 1,774.20. The Nasdaq composite fell 47 points, or 1.1% to 4,051.43. The market is currently suffering through a corrective phase after running up 30% in 2013.

Downward pressure on U.S. stocks returned as Wall Street also weighed the impact of Turkey and South Africa's moves to hike interest rates in an effort to stem emerging market turmoil.

As expected, citing a pick up in economic activity since it last met in mid-December, the Fed said it would reduce its purchases of long-term Treasuries and mortgage-backed bonds to $65 billion per month, down from $75 billion last month. The Fed continued on its "tapering" track despite a hiccup in job growth in December and recent market turbulence centered in developing markets. The Fed did not mention the emerging market turmoil in its statement.

The two-day Fed meeting, which wrapped up Wednesday, will be the last presided over by Ben Bernanke, who is stepping down after eight years as chairman and will be succeeded next week by Vice Chair Janet Yellen. She is expected to stick closely with Bernanke's policies.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.67% from 2.75%.

Jitters about emerging economies were temporarily soothed early in the trading session after the Turkish central bank's aggressive interest rate hike late Tuesday to stabilize its currency and China's infusion of funds into its banking system. But that original burst of optimism was short-lived as investors questioned whether the rate hikes were enough to calm markets.

Turkey's central bank hiked its overnight lending rate to 12% from 7.75% - a move more aggressive than what most analysts expected. The South African Reserve Bank on Wednesday raised its key interest rate to 5.5%, up from 5%, to defend its currency, which has been falling sharply.

Turkey's rate hike is viewed as a test case for other emerging market countries. The move is intended to stem capital flight from these countries and combat inflation. The downside is that rising rates can hobble domestic economies as borrowing rates rise. The risk of slowing growth in emerging markets puts growth targets for the global economy in peril, analysts say.

Wall Street will also be eyeing earnings reports from U.S. companies. Before the opening bell, Dow Chemical topped earnings forecasts by a wide margin and also topped revenue projections. Aircraft maker Boeing also topped both earnings per share and revenue projections, although Wall Street was unimpressed as Boeing also lowered its forward guidance.

On Tuesday, U.S. stocks broke a losing streak carried over from last week.

The S&P 500 rose 10.94 points, or 0.6%, to 1,792.50. The Dow gained 90.68 points, or 0.6%, to 15,928.56. The Nasdaq climbed 14.35 points, or 0.4%, to 4,097.96.